ShadowPad Backdoor Arises

Friday, 18 August 2017 05:55 AM

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Hackers are continually innovating and becoming fundamentally sneakier in how they are targeting business. In the NotPetya attack earlier this year we saw hackers dropping malicious code into legitimate accounting software updates. Another instance of corrupting software update mechanisms has again been used. Researchers at Kaspersky’s Global Research and Analysis Team (GReAT) have detected another similar styled attack. Dubbed ShadowPad the secret backdoor gave attackers complete control over networks hidden behind legit cryptographically signed software sold by NetSarang. Founded in 1997 NetSerang develops, markets and supports secure connectivity solutions and specializes in the development of server management tools for large corporate networks. The company has headquarters in both the United States and South Korea with the company boasting clients from banks, media firms, energy companies, and pharmaceutical firms, telecommunication providers, transportation and logistics and other industries.

Injected backdoor through update mechanism

Whomever the authors of the backdoor were put an inordinate amount of time into hiding the backdoor. The suspicious code was hidden within layers of legitimate code found within NetSarang’s software updates. The backdoor, which would allow the hacker control of the targeted network, is located in the nssock2.dll library within NetSarang's Xmanager and Xshell software suites which are used by hundreds of companies. The new updates went live on 18 July and the backdoor was only detected 17 days later. While it was initially believed that no networks were hijacked, Kaspersky revealed later that an unnamed institution in Hong Kong experienced the backdoor used to gain access to sensitive data.

Kaspersky notified NetSarang who acted quickly to pulling down the compromised updates and replacing them with clean versions. Part of the reason for the slow detection was the requirement for the backdoor to be activated first before malicious packets could be sent to the compromised network. The backdoor would ping out only every 8 hours to a command and control server sending basic information of the compromised network including domain names, network details, and usernames.

How the backdoor is activated

The activation of the backdoor occurs when a specially crafted DNS TXT record for a specific domain name which is generated according to the date. Once triggered the command and control server sends the decryption key for the next stage of the code. Once the decryption key is received the backdoor is effectively open. The data exchanged between the module and the C&C is encrypted with a proprietary algorithm and then encoded as readable Latin characters.

Once active ShadowPad provides a complete backdoor to the attacker. The attacker can then download and execute arbitrary code create processes, and maintain a virtual file system (VFS) in the registry, which is encrypted and stored in locations unique to each victim.

Who’s responsible?

The researchers at Kaspersky cannot say with any amount of confidence who could possibly be behind ShadowPad. The authors of ShadowPad were careful not to leave any obvious traces or indicators as to who that might be. The researchers did, however, note that techniques used in ShadowPad were similar to techniques were used in past malware variants PlugX and Winnti, which were allegedly developed by Chinese-speaking authors. While assuming who the authors may be is difficult, it is clear that such attacks are not done by your run of the mill hacker who buys malware on the Dark Web and hopes to infect as many systems as possible in the shortest possible time. In the case of the NotPetya attacks, many experts believe the ransomware was deployed as a smokescreen to hide the original intention of the threat actors. Given the amount of institutions and industries that use NetSarang’s product the potential damage that can be caused is immense, that there is only one instance of the backdoor been triggered there can be a collective sigh of relief.

NetSarang should be congratulated on how they handled the situation. Once notified by Kaspersky, NetSarang informed customers and took down the compromised updates. This is a great example of cooperation between security researchers and development companies that are rare. More often than not many companies will ignore warnings until it is too late and a war of words ensues as to who is responsible.

How to detect the backdoor and protect against further malicious attacks?

NetSarang has rolled out an update that effectively kills the malicious software. It is advised that administrators install the latest version of NetSarang’s package to protect against further threats.

Additionally, administrators can check if there were DNS requests from your organisation to the following domains:

While previous cyber threats have made international headlines and caused a media storm within the IT sector they were fairly amateurish in execution. The NotPetya campaign earlier than this year displayed the resourcefulness and inventiveness of what could be achieved by hackers. ShadowPad is an example of both how dangerous and ingenious a successful supply chain attack can be. Given the advantages of covert data collection, similar attacks can be expected time and time again. Such attacks are likely to target software vendors providing software and solutions to multiple industries and companies within varied economic sectors. Although it may seem that detecting the malicious activity 17 days after it was deployed may seem like an unbearably long time, in most cases such attacks can take months or even years to detect. In this instance, the value of threat intelligence and open cooperation have been proven invaluable measured against the potential damage that may have been caused.